"Economics / Finance / Banking" Essays 981-1000

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Economical Situation in Saudi Arabia Thesis

… Saudi Arabia's economy has traditionally relied heavily on oil revenues, but in recent years that government has followed the lead of other Gulf nations in taking steps to diversify the economy. The economic plan incorporates several elements. Among them are… [read more]

Frequency and Severity of Recent Financial Crises Essay

… frequency and severity of recent financial crises raise doubts about the effectiveness of the IMF's supervision and crisis management policies. Discuss with reference to emerging market crises or the sub-prime crisis of 2008-2009.

The International Monetary Fund (IMF) and the… [read more]

Is Treatment of Leases Problematic in Financial Statements? Essay

… Treatment of Leases

The current treatment of leases differentiates between two types of leases, the finance lease and the operating lease. The former represent leases that transfer the entire set of risks and rewards of an asset to the entity; all others are considered operating leases. Only finance leases are included on the balance sheet, meaning that the majority of leases exist off balance sheet (Lister, 2009). Yet, these leases remain an obligation for the firms, subject to the specific terms of the lease.

This treatment of operating leases is considered by many to not be congruent with fundamental accounting principles. The intent is that public companies produce financial statements that allow the reader to understand the company's financial situation. There is concern that operating leases obfuscate the company's actual situation with respect to its liabilities. An operating lease only grants the lessee the right to use the asset (Damodar, n.d.). As such, the company does not assume the liabilities associated with the asset. However, the asset does represent a liability, insomuch as the lessee is obligated to make payments on the lease. These are considered, however, to be operating expenses. The problem that this creates is that many firms have a high rate of fixed expenses. These expenses are contractual obligations. Investors have little way to determining the extent to which the company's operating expenses are fixed obligations. This makes it difficult then for investors to determine the firm's short-term liquidity situation and long-term debt load.

It seems reasonable that operating leases represent an area in need of improvement. International accounting bodies are discussing the possibility of putting operating leases on the balance sheet (Lister, 2009). This would give investors a clearer picture of firm's liquidity and debt situation. While the current treatment is controversial, changes to the treatment would also be controversial. Companies would have to examine their use of leases, and in some cases may need to renegotiate their debt if the increase in liabilities causes them to violate debt covenants (Lister, 2009). Leverage ratios would weaken for a number of companies as well, which would make it difficult for investors to compare current and past statements.

While the treatment of leases is problematic, it is no more so than the treatment of research and development expenses. The current treatment of R&D under American standards holds that R&D activities are expensed as they are incurred. This approach is problematic, because for many firms research and development is a part of a multi-year product development cycle. The treatment of R&D therefore represents an investment with a future payoff. International law splits the research and development phases. This treatment calls for the expensing of research but once a product is in the development phase there are expected future economic payoffs so the development…… [read more]

Product or Service Development Need Opportunity Issue or Challenge Thesis

… ¶ … Online Banking Services in Zimbabwe

In this age of rapid technological development, more and more economic agents strive to include it applications within their products and services in order to increase both customer satisfaction, as well as organizational efficiency, both which lead to increased financial results. One such application is internet banking, which offers a wide series of advantages to both banking institution, as well as customers. On the one hand, customers are no longer forced to stand in line, but can honor their payments from the comfort of their own desks, without consideration to geographic or temporal hurdles. On the other hand, banks register reduced operational costs and reduced levels of work.

Despite its attractiveness in highly developed economies, internet banking remains a relatively unpopular service within emergent economies. One such example is Zimbabwe. Academicians Dube Thulani, Chitura Tofara and Runyowa Langton, all scholars at universities in the South African country, have edited a study on the Adoption and Use of Internet Banking in Zimbabwe. Throughout the study's 13 pages, the authors evaluate the evolution of electronic systems and innovations within the Zimbabwean financial sector. They continue their effort by looking at the studies already produced by other researchers in order to set a theoretical framework for the study conducted. They offer the definition, characteristics and benefits of internet banking, followed by the presentation of the methodology used in the analysis and formulation of the conclusions. The statistical means by which the results are generated is also briefly discussed.

After the analysis is completed, Thulani, Tofara and Langton come to the realization that there are six types of inhibitors to internet banking in Zimbabwe. These challenges are succinctly revealed below:

internet…… [read more]

Sony Ratios and Analysis of Current Financial Essay

… ¶ … Sony

Ratios and Analysis of Current Financial Position

"A carefully selected, diversified set of financial ratios "provide(s) a vehicle to focus attention across the entire universe of financial information in a relatively disciplined fashion. Ratios are an excellent tool for evaluating large amounts of financial information and analyzing the performance of a company over time and compared to its industry peers." (Beers and Lund)

For the fiscal years 2007 through 2009, Sony's changes in underlying accounting principles do not appear to affect comparability of key financial ratios. Of course, the meaningfulness of the ratios calculated in this report still depends on the accuracy of Sony's financial statements.

Appendix B shows detailed financial ratios calculated from Documents submitted to the SEC (EDGAR) Form 20F and others. Earnings tell only part of the story. These financial ratios are very useful in understanding various indicators of the company's present and future prospects including profitability, management effectiveness, financial health, growth and operating efficiency.

Financial ratio analysis paints a gloomy assement for Sony. Across most of these financial ratios, with the exception of inventory turnover, Sony has shown a marked decline for the FY 2009-year vs. FY 2008 and FY 2007. Profit margin, a measurement of how much out of every dollar of sales a company actually keeps in earnings, is not fairing well in FY 2009. This number was at -1.28% in FY 2009, 4.16% in FY 2008 and 1.52% in FY 2007. Year to year growth for FY 2009 was -130.74%. Operating Margin, a measure of how successful a company's management has been in generating income from the operation of the business, is also causing room for concern for this company. At -2.13% for FY 2009, this number is down from 3.79% in FY 2008 and 0.94% from FY 2007. Year to year growth for FY 2009 was an alarming -156.03%. EBITDA margin measures the extent to which operating expenses use revenue. It is often more useful than operating margin because it excludes non-cash items such as depreciation. Sony's EBITDA margin is 6.43% in FY 2009 down from 12.06% in FY 2008 and 10.20% in FY 2007. Return on Assets, an idea as to how efficient management is at using its assets to generate earnings, is -0.82% for FY 2009. This compares unfavorable to FY 2008's 2.94% and FY 2007's 1.06%. Return on equity measures…… [read more]

Economics Price Elastic Products Essay

… Economics

Price elastic products are those in which an increase in price will trigger a percentage fall in demand (Investopedia, 2009). The percentage will depend on the degree of elasticity. Products with a high degree of elasticity will see a steep fall in demand in response to a price increase while those with lower elasticity will see a less steep fall in demand in response to the same price increase (Moffatt, 2009). The reverse is also true. A decrease in price will trigger an increase in demand that corresponds to the degree of price elasticity the product has.

As a retailer, the best time to have a price elastic product is when (wholesale) prices are at the equilibrium point. The objective of the retailer is not to maximize unit sales, but to maximize profit, which is defined as profit per unit multiplied by the number of units sold. The profit per unit is determined by the margin, which is typically a percentage of the wholesale price. The profit is the crucial measure because the retailer must cover fixed costs. It is important to…… [read more]

Credit Risk Management Thesis

… Credit Risk Management

Oklahoma State Bank

The Oklahoma State Bank is a privately held company and is categorized under heading of State savings banks and is not federally chartered. Its main branch is located in Harper County, Buffalo, OK, with… [read more]

MBA Decision Case Research Proposal

… ¶ … Decision

Ben's age affects his decision to get his MBA because the amount of time remaining in the workforce will have an impact on the present value of his future earnings. As a younger worker, Ben will have 33 more years of earnings after his MBA. If Ben was older, he would have fewer years of higher earnings to offset the cost. It is important to remember that it is not the higher earnings, but the differential earnings that make a difference in the evaluation of the MBA decision. The longer the time frame for these differential earnings, the more they will be worth. Additionally, because the post-MBA jobs will see raises in excess of the raises Ben expects from his current job, the wage differential between MBA Ben and non-MBA Ben will grow larger with each passing year. As a result, the younger Ben is, the more he will benefit from getting an MBA.

There are several non-quantifiable factors that could affect Ben's decision to get an MBA. Intrinsic factors are often a substantial motivator for workers in knowledge-based positions. The MBA will give Ben a better position than the one in which he currently works. Additionally, the MBA will significantly improve Ben's prospects for promotion. This is relevant not just for the financial rewards, but for the overall job and life satisfaction that Ben will receive. Although he is happy in his current job for now, he may not be happy holding that position over the long-term, and the MBA gives him the opportunity to take on progressive positions that will consistently challenge him throughout his career.

Another non-quantifiable factor for Ben may be the opportunity to expand his network of contacts. The contacts and network one establishes in an MBA program can be some of the most important benefits of such programs. These contacts can remain with an MBA for their entire life, and as such can be valuable sources of new job and investment opportunities. The contacts can provide a much greater degree of career and life flexibility than Ben would find if he sticks with his current position. This factor can influence not only his decision to enroll in an MBA program, but his choice of program as well.

3. From a purely financial standpoint, the value of each decision can be weighed strictly by a present value calculation. The future cash flows of each option are discounted back to the present value, using the discount rate. The total of the present values for all the years is summed as the net present value. The option with the highest net present value is the option that Ben should pursue, from a financial standpoint. Assuming all salaries are paid at the end of each year, the best option for Ben from a financial standpoint is to attend Wilson University. This option carries a net present value of $1.207 million, compared with $1.072 million at Mount Perry and $0.787 million at Ben's current job with… [read more]

Present Value Research Proposal

… ¶ … Value

The Coca Cola Company is a strong international player and its power has been manifested in different manners and at different times, with the most recent example being the company's results for 2008. While a large proportion of the global economic agents were registering decreasing revenues in the context of the internationalized economic crisis, the Coca Cola incomes followed a sustained ascendant trend. This is true for most of their financial highlights, including the dividend payments made to shareholders. Throughout the five years from 2004 to 2008, the company's net operating revenues increased from $21,742,000,000 to $31,944,000,000; cash dividends increased from $1,000,000 in 2004 to $1,520,000 by 2008 (the Coca Cola Company 2008 Annual Review).

The decision of weather or not to invest in the company is generally a complex one, despite the financial successes forwarded by the Coca Cola executives. A first endeavor in pronouncing a verdict is that of assessing the company's performances in order to identify its ability to pay its short- and long-term debts:

The dividend yield for 2008 is of 3.29, significantly higher than the industry's 0.41 average, meaning that the company is highly able to generate money from the investors' contributions; the trend has also been maintained throughout the past five years -- the average dividend yield for the past five years is of 2.63, higher than the 1.74 industry average; the growth rate for the past five years is 11.55, again higher than the 7.76 industry average

The Coca Cola sales ratio registered a negative value of 8.61 as opposed to only -1.22 in the industry (the trend is however a growth one for the past five years, with a rate of 8.90); in these times of economic hardship, the Coca Cola products seem disposable items and demand for them has suffered reductions

The quick and current ratios indicate values below the industry averages, meaning that…… [read more]

Regulatory Review After the Credit Crisis What Went Wrong in Supervision Term Paper

… Regulatory Review after the Credit Crisis: What Went Wrong in Supervision?

In retrospect, the handwriting was on the wall for all to see and many observers today are questioning how regulators could allow the economic meltdown to reach it current… [read more]

Finland and Nokia Technology Thesis

… Finland and Nokia

The reciprocity of Finland's educational and technology investment strategies at the government level are specifically designed to give its telecommunications companies competitive advantages in global markets. This is also driven by the deliberate strategy within Finland of creating a myriad of telephone systems that purposely did not integrate with each other, as the nation wanted to make it as difficult as possible for the Russians to communicate if they chose to invade from the east (Doz, & Kosonen, 2008). These two factors if exceptionally high levels of investment in education and the deterrent of making their telephone systems as incompatible with each other as possible are the catalyst that make the relationships between the Finnish government and Nokia so unique globally (Kautto, 2007). The implications of this strategy on government, economy, education, religious systems and the national technology maturity are discussed in this paper.


Just like the U.S. government, the Finnish government has judicial, legislative and executive branches of their government. Their president is elected for six-year terms, and can serve two terms, just as American presidents can. The president also appoints the Prime Minister, the equivalent of the U.S. Secretary of State. The Finnish government is governed by a 200 member parliament that is elected according to population densities of regions, which each Member of Parliament serving four years. There is no House of Representatives and Senate, as is the case in the U.S. Instead the Parliament presides and defines laws for the entire country over time. Ironically the political landscape of Finland in many ways mirrors its telecommunications legacy in that both are highly balkanized, fragmented, with highly individual priorities and agendas (Kautto, 2007). Despite the highly balkanized nature of the political landscape however the country has been able to survive intact through exceptionally challenging recessions through the 1994 -- 1996 timeframe that bordered on economic depressions (Westerholm, 2009).


Over the last fifty years Finland's economy has progressed from being primarily dominated by food stuffs, shipbuilding, pulp and paper, and textiles to a manufacturing and service-dominated economy (Makinen, Yannatta, 1998). Finland's concentration on transforming its economy from being primarily reliant on raw materials to manufacturing and services has required exceptional levels of Gross Domestic Product (GDP) investment in education, with the result of Finland dominating the Scandinavian region with PhD graduates (Makinen, Yannatta, 1998). Today according to the CIA Fact Book the GDP of Finland will grow at 4.9% and the country attained a Per Capita Income of $37,200 in 2007, which is among the highest in Europe (Westerholm, 2009). The long-term plans put into place decades ago have been successful in transforming the Finnish economy into a services-dominated one, with 64% of total GDP in 2008 from this sector, and 33.2% from manufacturing, the remainder from agriculture (2.8%). The transformation of Finland has been nothing short of remarkable given the exceptionally deep economic recession they experienced as a nation in…… [read more]

State Building and Civil Society in Eastern Europe After the Communism Thesis

… ¶ … building and civil society in Eastern Europe after the communism

General considerations

Poland and Ukraine are two of the countries that have come out of the Communist block and have embarked in a process known as transition, from… [read more]

Constitution Economic Powers Constitution, Article Research Proposal

… Constitution Economic Powers

Constitution, Article I, Section 8: The Economic Powers of Congress

The economic powers granted to Congress by the United States Constitution are numerous and varied, with far-reaching and often complex implications and effects. The basic underlying principles… [read more]

Global Financial Crisis: A Comparison Thesis


The impact of the global financial crisis upon the countries of Saudi Arabia and the United Arab Emirates, while slower in being realized than throughout the rest of the world have nevertheless impacted both Saudi Arabia and the UAE. Since Saudi Arabia is now part of the global economy there is no way that being affected from the global financial crisis is possible however, due to the large holdings of investors and banks in Saudi Arabia and the UAE coupled with the falling prices of raw commodities, the governments and investors of both Saudi Arabia and the UAE are uniquely positioned at the present.


The purpose of this study is to examine the impact of the global financial crisis and specifically to examine the experience of this crisis in Saudi Arabia and the UAE.


The significance of the present study is the knowledge that will be added to the existing knowledge base of the impact of the financial crisis on Saudi Arabia and the UAE.


The present financial crisis has derived from more than one source although many blame this on the subprime mortgage industry. The truth is that the present financial crisis can be blamed on many aspects of economic policy and practice areas. The work of Jawai (2008) states that the problems "stem from the collapse of the dotcom boom in the early part of the decade and the subsequent period of low interest rates." (p.2)

Lower interest rates worked to drive excessive lending and risk-taking in the financial sector. In 2006, 15% of the mortgage market in the…… [read more]

Financial Management in Multinational Organizations Essay

… Financial Management in Multinational Organizations

The contemporaneous business community is marked by a wide series of features, such as an increasing emphasis placed on customer satisfaction or on employee on the job satisfaction. Aside these however, two crucial elements define… [read more]

Flat Tax on Income Research Proposal

… Flat Tax on Income

The objective of this work is to examine the pros and cons of a flat tax on income as a viable option to deal with the current recession in the United States. The concept of a… [read more]

Keynesian and Marxism Economics Thesis

… Keynesians and Marxians

Keynesians vs. Marxist Economics and the Economy Today

The economy of today is changing rapidly and it can be debated that the old theories that applied to the economy of the early 20th century no longer apply.… [read more]

New World of Financial Risk Essay

… ¶ … New World of Financial Risk. A synopsis of the content is given followed by a specification of the thesis's main point. Three supporting opinions/reasons for this thesis are outlined, as well as three opposing opinions/reasons. Finally, a summary and opinion of the thesis is presented.

The New World of Financial Risk

The following paper reviews the article The New World of Financial Risk (Johnson & Kwak, 2009). A synopsis of the content is given followed by a specification of the thesis's main point. Three supporting opinions/reasons for this thesis are outlined, as well as three opposing opinions/reasons. Finally, a summary and opinion of the thesis is presented.

Johnson and Kwak (2009) note that when it comes to human endeavor and financial and business activities, risk is ever-present. For this reason, managing risk has been a concern for millennia. Today, the risk diversification and management are critical components of modern investment and finance. Yet, with risk comes opportunities for rewards. It is not risk itself that is bad, but instead mismanagement or underestimating risk that can be detrimental. One such area of troublesome risk is over leveraging.

Using Lehman Brothers Holdings, Inc.'s collapse as an example, Johnson and Kwak (2009) state that they had a leverage ratio above 30. Although high leverage is not necessarily a death knell, it's what is done with the funds that are borrowed. The catalyst for Lehman's ultimate failure was liquidity risk, which snowballed into the Federal Reserve freezing money markets and financial institutions reconsidering counterparty risk, which eventually led to the AIG bailout.

The last two decades has seen a market where participants have systematically underestimated risk. Part of this is due to the psychological effect concerning the fact that the longer one goes without a crisis the more convinced one becomes that crisis can be averted. In addition, investors relied on bond rating agencies who "made dubious calls in the past several years" (Johnson & Kwak, 2009). Faulty value-at-risk models, unanticipated housing price declines, securitization creating even more risky securities, and new ways to hedge fixed-income securities all contributed to the financial problems. In response, new tools were developed.

According to Johnson and Kwak (2009) new liquidity measures, guarantees for a variety of assets, and bank recapitalization was developed to deal with the new world of risk. However, there are still no guarantees that these will work. Sub-prime mortgages, prime mortgages, commercial mortgages, auto loans, credit cards, corporate debt, and mortgage-backed securities are all possible areas where banks are expected to take writedowns. Non-financial firms too are experiencing economic troubles, with the worst recession in decades. In the short-term, the authors surmise, businesses will just have to adapt to doing business with less credit. Long-term, Johnson and Kwak look to new regulations and more conservative financial institution behavior, to create a healthier and more transparent financial system. Of course, the downside is this will lead to increased costs of doing business.

Three Supporting Opinions/Reasons:

The first supporting opinion Johnson and Kwak (2009)… [read more]

Gold Standard the Federal Reserve's 'Cross Thesis

… Gold Standard

The Federal Reserve's 'Cross of Gold': The Great Depression and the existence of the gold standard

The causes of the Great Depression are still hotly debated amongst economists, even today. Usually cited causes include the over-speculation by investors… [read more]

Economic History in Economic Terms, Globalization Research Proposal

… Economic History

In economic terms, globalization is the process of increasing economic integration between countries, leading to the emergence of a global marketplace or a single world market. Many had hoped that globalization would lead to conditional convergence for developing countries as they grew faster, that is, conditional on their faster rate of factor accumulation. However, Lant Pritchett (1997) in Divergence, big time argues that there has instead been divergence in relative productivity levels and livings standards between developed and developing countries from 1870 to 1990. While there are some issues with Pritchett's analysis, it appears that developed and developing countries are not equally enjoying the intended benefits of comparative advantage

Pritchett finds that, between 1870 and 1985, the ratio of incomes in the richest and poorest countries increased six fold, the standard deviation of per capita incomes increased by between 60 and 100%, and the average income gap between the richest and poorest countries grew almost nine fold (from $1,500 to over $12,000). In contrast, there is strong convergence in per capita incomes for developed countries, although not at a uniform rate, over time. Since 1870, there has been no obvious acceleration in their growth rates; the average growth rate of the 17 developed countries between 1980 and 1994 is almost the same as that between 1870 and 1960. Hence, developing countries were not outpaced; they simply could never catch up to their developed counterparts.

Although Pritchett's analysis is compelling, this author does acknowledge shortcomings of the historical analysis. Most notably, analysis of long-run convergence or divergence is hindered by the lack of reliable historical estimates of per capita income for poor countries. To compensate, the author makes certain assumptions regarding the least possible levels of incomes in the developing countries. Further, Pritchett states that,

"Defining the set of countries as those that are the richest now almost guarantees the finding of historical convergence, as either countries are rich now and were rich historically, in which case they all have had roughly the same growth rate (like nearly all of Europe) or countries are rich now and were poor historically (like Japan) and hence grew faster and show convergence."

For example, Pritchett admits that the sample of developed countries does not include countries such as Argentina or India which are countries that tend to find convergence.

There are other limitations of Pritchett's article which the author does not mention. The 1997 timing of Pritchett's article as well as the cut off date for data analysis, 1990, limits inclusion of a recent decade which experienced rapid globalization with countries such as India and China experiencing tremendous growth. Some may argue for various reasons beyond this scope of this paper that this period is more indicative…… [read more]

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